By Steve Adubato, PhD

Difficult and stressful economic times can present opportunities for leaders and managers to communicate powerful messages. Sometimes those messages are communicated more in what we DO as opposed to simply what we SAY.

Consider the case of Montclair, NJ township manager Joe Hartnett, who according to this week’s Star-Ledger article by Philip Read, “likens himself to a CEO of a 450-employee operation”. Hartnett’s current salary is $153,292. Like many people at high-level positions in government or the private sector, Hartnett was scheduled for a pay increase in the new year, but opted not to take it. In total, his decision not to take the pay hike produced a $12,000 savings for the municipality.

In that same Star-Ledger article it was also noted that Essex County Executive Joe DiVincenzo and his senior staff will “forgo salary raises for two years”; and in an article published the same day in the Star-Ledger, “27 Morris County administrators have volunteered to accept cuts in their annual pay raises for the coming school year.”

While all these cases involve leaders and managers taking pay cuts or foregoing pay hikes, the message being communicated is relevant for any professional. Clearly, none of these actions alone will address the serious fiscal challenges an organization faces. Some will even argue that they are largely symbolic. However, when employees are being asked (or told) to do more with less and many are being laid off just to balance a budget, these actions by top leaders have the potential to communicate much more.

When leaders decide to pass on pay hikes, bonuses or perks that aren’t cheap, the following messages can be sent:

• The leader gets it. He or she understands that pain and sacrifice has to start at the top and it is not enough to simply ask or demand that others to take a hit if you are going to protect yourself. Further, because those at the top usually earn the most, they have the greatest ability to give up some money while the rank and file are hit the hardest.

• When it comes to perks, how leaders handle them matters a lot. Ask yourself, what did it communicate when the three auto industry executives traveled to Washington looking for a $25 billion bailout from Congress when each of them separately took a private jet to get to Capitol Hill at a cost of tens of thousands of dollars? They may not have realized it, but those executives were communicating a very contradictory message. It also communicated arrogance and insensitivity about how their request for a bailout would be perceived in light of their lavish mode of transportation.

• When executives don’t take the dollars or perks they are contractually able to, it can sometimes make it easier to ask others to be more flexible and to compromise. There are no guarantees here and many will argue that because you are making more, the sacrifice is insignificant. But leaders must realize that even when you do the right thing, it is not going to make you popular with everyone. However most reasonable people will appreciate the gesture and respect you for it.

• Finally, beyond pay and perks, leaders and managers should also understand that whether you have a holiday party or not this year, significant messages are being communicated about the organization’s priorities and financial situation. If you have a party, extravagance is definitely not the way to go. (Particularly if the company is laying off people.) And consider that many leaders who opt not to have expensive parties are choosing to give employees an extra day or two off around the holiday. This communicates that you understand how valuable that time is to be with family, friends or just to get away from a stressful workplace environment.

Words and speeches clearly communicate; however, action (or lack thereof) surrounding pay, perks and parties, sometimes communicates so much more. Let me know what you think. Write to me at This email address is being protected from spambots. You need JavaScript enabled to view it.